Custom Cones USAThe cannabis industry has witnessed numerous trends, but few have been as explosive as the rise of pre-rolls. Once a niche product, pre-rolls have surged to become the third-largest cannabis category, reshaping consumer preferences and market dynamics.
Diving deep into data from Headset, which tracks consumer transactions at retailers and dispensaries in 12 U.S. markets, gives a clearer picture on the current state of the pre-roll industry and its bright future.
Lighting up the market
The pre-roll segment’s growth has been nothing short of remarkable. From June 2023 to June 2024, pre-rolls generated over $1.3 billion in sales, capturing a 14.6% market share across tracked markets. With 131.7 million units sold in this period, it’s clear that consumers have embraced this convenient, ready-to-consume format.
But the true testament to pre-rolls’ meteoric rise lies in their long-term growth trajectory. Since 2019, the pre-roll market has experienced a staggering sixfold increase in revenue. Total pre-roll sales soared from $469 million in 2019 to $2.7 billion in 2023, showcasing the category’s explosive growth in just four years.
Moreover, pre-rolls have steadily increased their market share year over year. From a 9.8% share in 2020, pre-rolls have climbed to 14.9% as of June 2024. This consistent growth in market share indicates that pre-rolls are not just riding the wave of overall cannabis market expansion, but are actually capturing a larger slice of the pie.
This growth isn’t just about dollars; unit sales have skyrocketed as well. In 2019, 56 million pre-rolls were sold across tracked markets. By 2023, that number had more than quadrupled to 247 million units. This surge in both revenue and units sold underscores the increasing consumer demand for pre-rolls.
Rise of premium pre-rolls
Driving this growth is the emergence of “Connoisseur/Infused” pre-rolls. This premium segment has quickly become a dominant force, overtaking traditional single-strain offerings with $1.12 billion in sales in 2023 alone.
These enhanced pre-rolls, infused with concentrated cannabis extracts or featuring ultra-premium flower, cater to consumers seeking elevated experiences. The success of infused pre-rolls reflects a broader trend of premiumization in the cannabis industry, with consumers increasingly gravitating towards specialized, high-end products.
The market share of infused pre-rolls has been rapidly accelerating, reaching 44% of the pre-roll category in 2024. This trajectory suggests that infused pre-rolls will continue to capture additional market share from conventional pre-rolls in the coming years.
Legalization: fueling the fire
The ongoing wave of cannabis legalization across the United States remains the most significant catalyst for pre-roll market growth. Each new legal market represents fresh opportunities for expansion and innovation in the pre-roll space.
Several states are poised to contribute significantly to this growth. New York, which legalized cannabis in 2021 but is yet to fully open its still nascent industry, is expected to see its pre-roll market explode from $20 million in 2023 to potentially $100-$150 million annually in the next few years.
Ohio, with its population of nearly 12 million, is another key state to watch. As recreational cannabis sales are set to begin at any moment, Ohio’s pre-roll market could potentially surpass $150 million in the next few years, following a trajectory similar to Illinois.
Looking ahead, all eyes are on Florida, where voters will weigh in on cannabis legalization in November. As the third-largest state in the U.S., Florida represents the biggest potential for pre-roll market growth. If legalization passes, Florida could eventually rival California’s $750 million pre-roll market.
Projecting the future: 2030 and beyond
As we look toward 2030, the pre-roll market is poised for continued growth and evolution. By this time, we could see pre-rolls stabilizing at around 20% of the total cannabis market, with annual sales potentially exceeding $5 billion.
Product diversification will likely accelerate, with an even wider variety of infused and specialty pre-rolls hitting the market. As technology and production methods improve, we can expect more sophisticated and potent products to emerge, catering to increasingly discerning consumers.
The landscape of legalization is also likely to shift dramatically by 2030, especially with the recent news that the DEA will potentially reschedule cannabis to a schedule III drug. With more states expected to legalize cannabis, the pre-roll market will see a broader customer base and even more significant sales volumes.
The unstoppable ascent of pre-rolls
The future is blazing bright for pre-rolls as this consumer-friendly category continues its upward trajectory. From its humble beginnings to its current status as a cannabis industry powerhouse, the pre-roll segment has demonstrated remarkable growth and resilience.
Driven by consumer demand, product innovation, and expanding legalization, pre-rolls are poised to remain at the forefront of the cannabis industry. Whether it’s the frictionless experience for new consumers, the premium offerings for connoisseurs, or the innovation playground for brands, pre-rolls seem destined to reign as cannabis’ signature product for years to come.
